Wednesday, October 24, 2012

"Democracy Just Doesn't Always Reward Anticipation"

Jennifer Gathright is a talented Harvard undergraduate.  I recommend her recent Crimson piece.  I like this paragraph;

"This contradiction isn’t our fault—democracy just doesn’t always reward anticipation. Politicians are accountable to voters whose main concerns generally include how to feed their families and keep their jobs and houses. And it is this combination of preoccupied voters and cowardly lawmakers that has kept the U.S. from tackling climate change in any sort of comprehensive way."

In a democracy,  perhaps she is right that the median voter isn't in the mood and this voter's "anticipation" is what is critical to attract election hungry politicians to embrace the issue.    But, she is repeating part of my Climatopolis logic.    The beauty of free markets is that we do not need the 50th percentile of entrepreneurs to anticipate the challenges we will face.  We just need a handful.  Once one entrepreneur creates a "Facebook", the idea can be scaled up using the production capability of China and India.   Democracy relies on the median while innovation has a very different production process that combines the ideas of dreamers, with capital from Wall Street and mass production from low wage nations.  That's a potent system that doesn't rely on the vagaries of democracy.

In this sense, climate adaptation is more likely than carbon mitigation.  The relevant institutions and players have the right incentives to step up in the case of adaptation.    So, while democracy doesn't always reward anticipation,  there are many modern success stories in the market place who highlight the free market power of anticipation.    In the long run, we all prosper.